Warby Parker Inc. (NYSE:WRBY) Q1 2023 Earnings Conference Call May 9, 2023 8:00 AM ET Company Participants Neil Blumenthal - Co-Founder, President, Co-CEO & Co-Chair Dave Gilboa - Co-Founder, Co-CEO & Co-Chair Steve Miller - Senior Vice President & Chief Financial Officer Conference Call Participants Dana Telsey - Telsey Group Oliver Chen - TD Cowen Edward Yruma - Piper Sandler Brooke Roach - Goldman Sachs Mark Altschwager - Baird Mark Mahaney - Evercore Operator Thank you, and good morning, everyone. Here ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | FORWARD-LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES 2 .............. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving pro ...

Part I [Business](index=7&type=section&id=Item%201.%20Business) Warby Parker is a direct-to-consumer eyewear brand with an omnichannel model and a social mission - Warby Parker is a direct-to-consumer brand that designs and sells its own eyewear, including glasses, sunglasses, and contact lenses, through **200 retail stores** and its e-commerce platform[24](index=24&type=chunk)[25](index=25&type=chunk) - The company operates in the U.S. eyewear market, estimated at approximately **$76 billion**, and plans to expand its retail footprint to over **900 stores** in the U.S[34](index=34&type=chunk)[41](index=41&type=chunk) - Key growth strategies include strengthening engagement with existing customers, growing brand awareness, expanding the retail footprint, and continuing to invest in technology and digital experiences[41](index=41&type=chunk) - As of December 31, 2022, the company had **200 retail stores**, including 195 in the U.S. and 5 in Canada, with 150 of these stores offering in-person eye exams[32](index=32&type=chunk)[47](index=47&type=chunk) - The company is a public benefit corporation with a **"Buy a Pair, Give a Pair" program**, having distributed over 10 million pairs of glasses to people in need[25](index=25&type=chunk)[68](index=68&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from rapid growth, supplier reliance, net losses, and material control weaknesses - The company acknowledges risks in managing its rapid growth to **200 retail stores**, its vertically integrated business model, and its expansion of vision care services[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - A significant risk is the reliance on a limited number of third-party suppliers, particularly for components from **China**, making the company vulnerable to supply chain disruptions[90](index=90&type=chunk)[93](index=93&type=chunk)[236](index=236&type=chunk) - The company has a history of net losses, reporting a **net loss of $110.4 million in 2022** and an accumulated deficit of $603.6 million[121](index=121&type=chunk) - The business is subject to extensive healthcare regulations, including the **corporate practice of medicine laws** and FDA regulations for its products, which are classified as medical devices[163](index=163&type=chunk)[172](index=172&type=chunk)[193](index=193&type=chunk) - The multi-class stock structure gives co-founders **significant voting control**, which may limit other stockholders' ability to influence corporate matters[266](index=266&type=chunk) - **Material weaknesses in internal control** over financial reporting have been identified, which could adversely affect investor confidence[279](index=279&type=chunk)[281](index=281&type=chunk) [Unresolved Staff Comments](index=57&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[299](index=299&type=chunk) [Properties](index=57&type=section&id=Item%202.%20Properties) The company leases all properties, including headquarters, optical labs, and 200 retail stores - Corporate headquarters are leased in New York, NY (79,474 sq ft), with other offices in Nashville, TN (approx. 32,941 sq ft total)[300](index=300&type=chunk) - The company operates two leased optical laboratories in Sloatsburg, NY (51,803 sq ft) and Las Vegas, NV (69,580 sq ft)[300](index=300&type=chunk) Retail Store Count by Location (as of Dec 31, 2022) | Location | Store Count | | :--- | :--- | | United States | 195 | | Canada | 5 | | **Total** | **200** | [Legal Proceedings](index=58&type=section&id=Item%203.%20Legal%20Proceedings) The company is not subject to any material pending legal proceedings - As of December 31, 2022, the Company was not subject to any pending legal matters or claims that could have a **material adverse effect** on its financial position[597](index=597&type=chunk) [Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[304](index=304&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=59&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE, and no dividends have been paid - Class A common stock is listed on the NYSE under the symbol **"WRBY"** since September 29, 2021[306](index=306&type=chunk) - The company has **not paid dividends** and has no current plans to pay them in the future[308](index=308&type=chunk) - No issuer purchases of equity securities were reported[309](index=309&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net revenue grew 10.6% in 2022, though the company incurred a net loss and identified control weaknesses [Financial Highlights and Key Metrics](index=61&type=section&id=Financial%20Highlights%20and%20Key%20Metrics) FY2022 saw revenue growth to $598.1 million and a net loss of $110.4 million amid customer growth Key Financial and Operational Metrics (2020-2022) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Revenue (in millions) | $598.1 | $540.8 | $393.7 | | Gross Profit (in millions) | $341.1 | $317.7 | $231.9 | | Net Loss (in millions) | $(110.4) | $(144.3) | $(55.9) | | Adjusted EBITDA (in millions) | $27.2 | $24.9 | $7.7 | | Active Customers (in millions) | 2.28 | 2.20 | 1.81 | | Store Count | 200 | 161 | 126 | Reconciliation of Net Loss to Adjusted EBITDA (FY 2022) | Line Item | Amount (in thousands) | | :--- | :--- | | **Net loss** | **$ (110,393)** | | Interest and other income (loss), net | (1,307) | | Provision for income taxes | 497 | | Depreciation and amortization expense | 31,864 | | Asset impairment charges | 1,647 | | Stock-based compensation expense | 98,655 | | Non-cash charitable donations | 3,770 | | ERP implementation costs | 687 | | Restructuring costs | 1,535 | | **Adjusted EBITDA** | **$ 27,202** | [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Revenue grew 10.6% in 2022, while gross margin declined and SG&A expenses decreased Net Revenue Comparison (2022 vs. 2021) | Year | Net Revenue (in thousands) | $ Change | % Change | | :--- | :--- | :--- | :--- | | 2022 | $ 598,112 | $ 57,314 | 10.6% | | 2021 | $ 540,798 | | | - The **10.6% revenue growth** in 2022 was driven by a 3.6% increase in Active Customers to 2.28 million and a 6.9% increase in average revenue per customer to $263[345](index=345&type=chunk)[346](index=346&type=chunk) - **Gross margin decreased from 58.8% in 2021 to 57.0% in 2022**, primarily due to increased sales of lower-margin contact lenses and higher store occupancy costs[347](index=347&type=chunk)[349](index=349&type=chunk) - **SG&A expenses decreased by $9.1 million (2.0%)** in 2022, mainly due to the absence of 2021's one-time Direct Listing and tender offer costs[350](index=350&type=chunk) [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $208.6 million in cash and believes its liquidity is sufficient for the next year - As of December 31, 2022, the company held **$208.6 million in cash** and cash equivalents[362](index=362&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $ 10,370 | $ (31,994) | $ 32,758 | | Net cash used in investing activities | $ (60,181) | $ (48,513) | $ (20,070) | | Net cash provided by financing activities | $ 3,291 | $ 22,999 | $ 245,936 | - The company has a **$100 million revolving credit facility** established in September 2022, which was undrawn except for $4.2 million in letters of credit[366](index=366&type=chunk)[370](index=370&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include foreign exchange, interest rates, and inflation, all deemed not material - The company is exposed to foreign exchange risk from its Canadian operations and purchases in Japanese yen and euros, but does not believe the effect is **material**[404](index=404&type=chunk) - Interest rate risk is **minimal** due to the short-term nature of its $208.6 million in cash and cash equivalents[405](index=405&type=chunk) - Inflation is acknowledged as a risk that could increase operating costs, but the company believes it has had a **limited impact** on results to date[406](index=406&type=chunk) [Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements show a net loss of $110.4 million and an adverse opinion on internal controls Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$ 568,707** | **$ 440,646** | | Cash and cash equivalents | $ 208,585 | $ 256,416 | | Inventory | $ 68,848 | $ 57,095 | | Right-of-use lease assets | $ 127,014 | $ — | | **Total Liabilities** | **$ 282,061** | **$ 154,648** | | Total lease liabilities | $ 173,378 | $ — | | **Total Stockholders' Equity** | **$ 286,646** | **$ 285,998** | Consolidated Statement of Operations Data (in thousands) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net revenue | $ 598,112 | $ 540,798 | $ 393,719 | | Gross profit | $ 341,062 | $ 317,749 | $ 231,935 | | Loss from operations | $ (111,203) | $ (143,661) | $ (55,632) | | **Net loss** | **$ (110,393)** | **$ (144,271)** | **$ (55,919)** | | Net loss per share, basic and diluted | $ (0.96) | $ (2.21) | $ (1.05) | - The independent auditor, Ernst & Young LLP, issued an **adverse opinion on the company's internal control** over financial reporting as of December 31, 2022, due to material weaknesses[413](index=413&type=chunk)[425](index=425&type=chunk)[426](index=426&type=chunk) - Effective January 1, 2022, the company adopted the new lease accounting standard (ASC 842), resulting in the recognition of **$109.4 million in right-of-use assets** and **$146.2 million in lease liabilities**[512](index=512&type=chunk)[514](index=514&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=110&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None[608](index=608&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses in IT and financial reporting - Management concluded that **disclosure controls and procedures were not effective** as of December 31, 2022, due to material weaknesses[609](index=609&type=chunk) - Two material weaknesses were identified: (1) **IT general controls** related to user access and change management, and (2) **financial reporting process controls** for segregation of duties and data validation[612](index=612&type=chunk) - Remediation measures are underway, including implementing a new ERP system and hiring more accounting staff, but the **weaknesses were not fully remediated** by year-end[613](index=613&type=chunk)[614](index=614&type=chunk) [Other Information](index=111&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[618](index=618&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, and Other Matters](index=112&type=section&id=Items%2010-14) Required disclosures are incorporated by reference from the company's 2023 Proxy Statement - Information for Items 10 through 14 is **incorporated by reference** from the forthcoming 2023 Proxy Statement[620](index=620&type=chunk)[622](index=622&type=chunk)[623](index=623&type=chunk) - The company has adopted a **Code of Conduct** applicable to all directors, officers, and employees, which is available on its investor relations website[621](index=621&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=113&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists filed exhibits and omits financial schedules as they are not applicable - All financial statement schedules are omitted because the required information is not applicable or is included in the consolidated financial statements or notes[626](index=626&type=chunk) - A list of exhibits filed as part of the Annual Report on Form 10-K is provided[627](index=627&type=chunk) [Form 10-K Summary](index=114&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no Form 10-K summary - None[631](index=631&type=chunk)

Warby Parker, Inc. (NYSE:WRBY) Q4 2022 Earnings Conference Call February 28, 2023 8:00 AM ET Company Participants David Gilboa - Co-Founder, Co-CEO & Co-Chair Steve Miller - SVP & CFO Neil Blumenthal - Co-Founder, President, Co-CEO & Co-Chair Conference Call Participants Dana Telsey - Telsey Advisory Group Mark Altschwager - Robert W. Baird & Co. Oliver Chen - Cowen and Company Alexandra Straton - Morgan Stanley Brandon Cheatham - Citigroup Operator Thank you, and good morning, everyone. Here with me today ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40825 (I.R.S. Employer Identification Number) Warby Parker Inc. 233 Spring Street, 6th Floor East New York, New York 10013 ( ...

Warby Parker Inc. (NYSE:WRBY) Q3 2022 Earnings Conference Call November 10, 2022 8:00 AM ET Company Participants Neil Blumenthal - Co-Founder and Co-CEO Dave Gilboa - Co-Founder and Co-CEO Steve Miller - SVP and CFO Conference Call Participants Edward Yruma - Piper Sandler Brandon Cheatham - CITI Dana Telsey - Telsey Advisory Group Operator Thank you and good morning everyone. Here with me today are Neil Blumenthal, Dave Gilboa our Co-Founders and Co-CEOs alongside Steve Miller, Senior Vice President and Ch ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | FORWARD-LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES 2 .............. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving profitabili ...

(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40825 Warby Parker Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or o ...

Warby Parker Inc. (NYSE:WRBY) Q2 2022 Earnings Conference Call August 11, 2022 8:00 AM ET Company Participants Neil Blumenthal - Co-Founder and Co-CEO Dave Gilboa - Co-Founder and Co-CEO Steve Miller - SVP and CFO Conference Call Participants Oliver Chen - Cowen Mark Altschwager - Baird Edward Yruma - Piper Sandler Brooke Roach - Goldman Sachs Brandon Cheatham - Citi Mark Mahaney - Evercore Operator Thank you, and good morning everyone. Here with me today are Neil Blumenthal and Dave Gilboa our Co-Founders ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR (646) 847-7215 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Securities registered pursuant to Section 12(b) of the Act: ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...